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CBO Releases a Report on Supplemental Security Income

December 11, 2012

In fiscal year 2013, more than 8 million people will receive Supplemental Security Income (SSI) payments at a federal cost of about $53 billion, CBO estimates.

Today’s CBO report, Supplemental Security Income: An Overview, discusses how the program works, who receives SSI payments, the program’s spending and its interaction with other government programs, the extent to which SSI affects people’s work and saving, and possible approaches to changing the program.

The federal government established the SSI program in 1974 to provide cash assistance to people who are disabled, aged, or both and who have low income and few assets.

Currently, about 60 percent of SSI recipients are disabled adults (ages 18 to 64), about 15 percent are disabled children (under age 18), and about 25 percent are aged adults (age 65 or over) with or without disabilities. Over the past two decades, participation among disabled adults has increased substantially, partly because of the relaxing of eligibility rules. In contrast, the share of the aged who participate in SSI has declined steadily, in part because average Social Security benefits have increased, leaving fewer aged people poor enough to qualify for SSI.

CBO projects that the number of SSI beneficiaries will decline slightly as a share of the population as the economy improves and as average Social Security benefits continue to increase. In addition, SSI payments per beneficiary are linked to prices, which tend to rise more slowly than gross domestic product per person. Therefore, CBO projects that SSI outlays will decline as a share of gross domestic product by about one-fifth during the coming decade.

Most SSI recipients probably could not earn or save significant amounts. SSI recipients who are disabled adults have been judged, through the disability determination process, to be unable to perform substantial work; and SSI payment amounts and asset limits are low.

Some potential changes would expand the program and others would shrink it. Those proposals would adjust the parameters of the program, such as payment amounts or income or asset thresholds; change certain eligibility criteria; establish more frequent reviews of recipients’ continuing eligibility; and change the program more fundamentally, for example by transferring control of the program to the states.

This report was prepared by Noah Meyerson of CBO’s Health, Retirement, and Long-Term Analysis Division.